Gas Export Target for Iraq Upgraded

Gas Export Target for Iraq Upgraded Gas Export Target for Iraq Upgraded

Iran will revise its natural gas export contract with Iraq, raising the export target by a third.

Iranian and Iraqi high-ranking officials had approved the final draft of the contract for exporting gas to Iraq after four days of negotiations on Sunday.

Iran will boost its natural gas export target from 25 million to 35 million cubic meters per day as part of Iran's gas export contract to Iraq, National Iranian Gas Company's director for international affairs said Wednesday.

"Based on our agreement, Iran's gas export to Iraq will increase during the five warm months of the year and the proposed amendment [to increase exports to 35 billion cubic meters] will take effect after both sides sign it," Azizollah Ramezani told Shana.

"The contract will start out at 4 million cubic meters per day and will grow to 35 million cubic meters per day on a preplanned schedule."

Other parts of the contract include engineering and technical services, including finance, technical and executive training courses, for the Iraqi side.

The contract's draft has been sent to high-ranking executives on both sides.

  Pricing Issues

Both Iranian and Iraqi officials have not divulged the gas export price to Iraq.

"Based on the agreement's conditions, price is a confidential issue. Nevertheless, it will be competitive and serve both sides' national interests," Ramezani said on Sunday.

The official said gas will be delivered to Iraq within two weeks of signing the agreement by the two states.

According to Ramezani, the Iraqi delegation, comprised of energy ministry officials, will hold technical sessions with Iranian gas experts to discuss operational issues, including the method of delivery and qualitative and quantitative measurements.

Asked about the exact time of delivery, he said, "Iraq's gas infrastructure is not ready yet. However, it is estimated that gas delivery will commence within a month."

  Long in the Making

Tehran and Baghdad signed a draft deal in 2013 to transfer Iran’s gas to two Iraqi power plants, which deal is worth $4-6 billion.

Gas will be exported from Naftshahr region in Kermanshah Province in the first phase, by diverging the branches of Sixth Iranian Gas Trunkline.

In March, Kameli, managing director of National Iranian Gas Export Company, said exports to Iraq could begin in May, if security conditions improved.

Iran first announced a delay in September last year, shortly after Islamic State militants took control of large swathes of Iraqi territory.

Although exports were expected to commence by the end of May, Hamdireza Araqi, managing director of National Iranian Gas Company, blamed technical and financial issues that seem to have been settled.